What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-15 compared with 2022-03-23 · 261 added, 271 removed, 586 unchanged (48% of the section changed)

2 unchanged sentences

We maintain “disclosure controls and procedures,”

as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

As of December 31, 2022, our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures.

1 unchanged sentence

Management’s Annual Report on Internal Control Over Financial Reporting

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f).

Management conducted an assessment of our internal control over financial reporting based on the framework established in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework.

Based on the assessment, management concluded that, as of December 31, 2022, our internal control over financial reporting was effective.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting as required by Section 404(c) of the Sarbanes Oxley Act of 2002.

Because we qualify as an emerging growth company under the JOBS Act, management's report was not subject to attestation by our independent registered public accounting firm.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

3 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes in conditions or that the degree of compliance with established policies or procedures may deteriorate.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Annual Report.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Annual Report was (a) reported within the time periods specified by the SEC rules and regulations, and (b) communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding any required disclosure.

Changes in Internal Control over Financial Reporting

There were no material changes in our internal control over financial reporting during the quarter ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

There was no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the year ended December 31, 2022, that have materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Attestation Report of the Registered Public Accounting Firm

2 unchanged sentences

Other Information .

2022 Annual Stockholder Meeting

The Company currently plans to hold its 2022 Annual Meeting of Stockholders (the “Annual Meeting”) on June 15, 2022 at 10:30 a.m.

local time virtually.

Pursuant to the provisions of the Company’s Bylaws, for any stockholder to propose business (other than pursuant to and in compliance with Exchange Act Rule 14a-8) or make a nomination before the annual meeting, the stockholder must have given timely notice in writing to the secretary and any such nomination or proposed business must constitute a proper matter for stockholder action.

Under the Company’s Bylaws, to be timely, a stockholder’s notice must be received by the secretary at the principal executive offices of the Company later than the close of business on the 90th day before the 2022 Annual Meeting nor earlier than the close of business on the 10th day following the day on which public announcement of the date of 2022 Annual Meeting is first made by the Company.

Because the Company did not hold an annual meeting last year, the Company has determined that the date by which stockholders must deliver such notice for the purposes of the 2022 Annual Meeting is April 2, 2022, which is 10 days after the filing of this Annual Report on Form 10-K.

Pursuant to Rule 14a-8, for a stockholder to submit a proposal for inclusion in the Company’s proxy materials for the 2022 Annual Meeting, the stockholder must comply with the requirements set forth in Rule 14a-8 including with respect to the subject matter of such proposal and must deliver the proposal and all required documentation to the Company a reasonable time before the Company begins to print and send its proxy materials for the meeting.

For the purposes of the 2022 Annual Meeting of Stockholders, the Company has determined that April 18, 2022 is a reasonable time before the Company plans to begin printing and mailing its proxy materials.

The public announcement of an adjournment or postponement of the 2022 Annual Meeting date will not commence a new time period (or extend any time period) for giving such notice under the Company’s Bylaws or submitting a proposal pursuant to Rule 14a-8.

Disclosure Regarding Forei gn Jurisdictions that Prevent Inspections.

Directors, Executive Offic ers and Corporate Governance.

The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of the Company’s fiscal year ended December 31, 2021.

The information required under this item is incorporated herein by reference to our definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2022.

Executive Compensation .

Security Ownership of Certain Beneficial Own e rs and Management and Related Stockholder Matters.

Certain Relationships and Related Transactions, and Director Independence.

Principal Accoun ting Fees and Services.

Exhibits, Financial Statement Schedules .

2 unchanged sentences

(3) Exhibits:

Tenth Amended and Restated Certificate of Incorporation of Registrant

Amended and Restated Bylaws of Registrant

Tenth Amended and Restated Certificate of Incorporation of Registrant, as currently in effect (incorporated by reference to Exhibit 3.1 of the Registrants’

Annual Report on Form 10-K (File No.

Amended and Restated Bylaws of Registrant, as currently in effect (incorporated by reference to Exhibit 3.2 of the Registrants’

Annual Report on Form 10-K (File No.

Description of Securities

30 unchanged sentences

333-260156) filed on October 8, 2021)

Lease Agreement, between Registrant and Ice Box, LLC, dated as of May 16, 2022 (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q (File No.

001-40971) filed on August 11, 2022)

List of Subsidiaries of Registrant

13 unchanged sentences

* Filed herewith.

**These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

# Indicates a management contract or any compensatory plan, contract or arrangement.

Confidential treatment has been granted for portions of this Exhibit pursuant to Rule 406 promulgated under the Securities Act of 1933, as amended.

Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized .

Aura Biosciences, Inc.

March 23, 2022

/s/ Elisabet de los Pinos

Elisabet de los Pinos

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

/s/ Elisabet de los Pinos

President and Chief Executive Officer

March 23, 2022

Elisabet de los Pinos

/s/ Julie Feder

Chief Financial Officer

March 23, 2022

/s/ David Johnson

Chairman of the Board of Directors

March 23, 2022

David Johnson

/s/ Giovanni Mariggi

March 23, 2022

Giovanni Mariggi

/s/ Antony Mattessich

March 23, 2022

Anthony Mattessich

/s/ Raj Parekh

March 23, 2022

/s/ Sapna Srivastava

March 23, 2022

Sapna Srivastava

/s/ Karan Takhar

March 23, 2022

Index to CONSOLIDATED Financial Statements

3 unchanged sentences

Consolidated Statements of Convertible Preferred Stock and Stockholders’

Equity (Deficit)

Consolidated Statements of Cash Flows

5 unchanged sentences

(the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’

deficit and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

equity (deficit) and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

23 unchanged sentences

Cash and cash equivalents

Marketable securities

Restricted cash and deposits

3 unchanged sentences

Right of use assets - operating lease

Other long-term assets

Property and equipment, net

Liabilities, Convertible Preferred Stock, and Stockholders’

Equity (Deficit)

Liabilities and Stockholders’

Current liabilities:

3 unchanged sentences

Total current liabilities

Deferred rent

Long-term operating lease liability

Warrant liability

Total Liabilities

Commitments and Contingencies (Note 12)

Convertible preferred stock (Note 7)

Stockholders’

Equity (Deficit):

Common stock, $ 0.00001 par value, 150,000,000 and 232,697,999 authorized at December 31, 2021, and December 31, 2020, and 29,211,643 and 381,123 shares issued and outstanding at December 31, 2021, and December 31, 2020, respectively

Common stock, $ 0.00001 par value, 150,000,000 authorized at December 31, 2022 and December 31, 2021, and 37,771,918 and 29,211,643 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total Stockholders’

Equity (Deficit)

Total Liabilities, Convertible Preferred Stock, and Stockholders’

Total Liabilities and Stockholders’

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

C onsolidated Statements of Operations and Comprehensive Loss

(in thousands except for share and per share data)

(in thousands except share and per share data)

Operating Expenses:

4 unchanged sentences

Other income (expense):

Change in fair value of warrant liability

Interest income (expense), including amortization of discount

Interest income, including amortization and accretion income

Realized loss on marketable securities

Loss on disposal of assets

Total other expense

Net loss and comprehensive loss

Other expense

Total other income (expense)

Net loss attributable to common stockholders—basic and diluted (Note 13)

1 unchanged sentence

Weighted average common stock outstanding—basic and diluted

Comprehensive loss:

Other comprehensive items:

Unrealized loss on marketable securities

Total other comprehensive loss

Total comprehensive loss

The accompanying notes are an integral part of these consolidated financial statements.

9 unchanged sentences

Balance, December 31, 2020

Issuance of Series D convertible preferred stock, net of issuance costs of $ 93

Stock-based compensation expense

Stock options exercises

Balance, December

Issuance of Series D convertible preferred stock, net of issuance costs of $ 18

Issuance of Series D Tranche 2, convertible preferred stock, net of issuance costs of $ 18

Issuance of Series E convertible preferred stock, net of issuance costs of $ 237

9 unchanged sentences

Stock based compensation expense

Stock options exercises

Stock option exercises

Balance, December

Other Comprehensive

Stockholders’

Balance, December 31, 2021

Issuance of common stock - follow-on offering, net of issuance costs of $ 263

Issuance of common stock under ATM facility, net of issuance costs of $ 336

Stock-based compensation expense

Vesting of restricted stock

Stock option exercises

Unrealized loss on marketable securities

Balance, December 31, 2022

The accompanying notes are an integral part of these consolidated financial statements.

6 unchanged sentences

Depreciation expense

Change in fair value of warrant liability

Stock-based compensation expense

Gain on disposal of property and equipment

Operating lease expense

Accretion on marketable securities

Gain (loss) on disposal of property and equipment

Changes in operating assets and liabilities:

Prepaid expenses and other assets

Other long-term assets

Accounts payable

3 unchanged sentences

Purchases of property and equipment

Purchase of marketable securities

Maturities and proceeds from the sale of marketable securities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock upon IPO, net of issuance costs

Proceeds from issuance of common stock upon initial public offering, net of issuance costs

Proceeds from issuance of common stock from follow-on offering, net of issuance costs

Proceeds from issuance of common stock under ATM facility, net of issuance costs

Proceeds from exercise of stock options

Proceeds from issuance of Series D convertible preferred stock, net of issuance costs

Proceeds from issuance of Series E convertible preferred stock, net of issuance costs

Proceeds from issuance of Series D convertible preferred stock, net of

issuance costs

Net cash provided by financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

6 unchanged sentences

Deferred offering costs in accounts payable

Loss on termination of operating lease

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):

10 unchanged sentences

(the “Company”

or “Aura”) is a clinical-stage biotechnology company leveraging its novel targeted oncology platform to develop a potential new standard of care across multiple cancer indications, with an initial focus on ocular and urologic oncology.

Within these consolidated financial statements, unless the context otherwise requires, references to the Company or Aura refer to Aura Biosciences, Inc.

The Company’s proprietary platform enables the targeting of a broad range of solid tumors using Virus-Like Particles, or VLPs, that can be conjugated with drugs or loaded with nucleic acids to create Virus-Like Drug Conjugates, or VDCs.

The Company’s VDCs are largely agnostic to tumor type and can recognize a surface marker, known as HSPGs, that are specifically modified and more broadly expressed on many tumors.

The Company is developing AU-011, its first VDC product candidate for the first line treatment of primary choroidal melanoma, a rare disease with no drugs approved.

The Company is also developing AU-011 for additional ocular oncology indications and in non-muscle invasive bladder cancer.

Aura’s team combines expertise in cancer cell biology, ophthalmology, and targeted therapies together with experience in the development and commercialization of orphan products for significant unmet medical needs.

Aura’s headquarters are located in Cambridge, Massachusetts.

or “Aura”) is a clinical-stage biotechnology company envisioning a new way to treat cancer.

Leveraging a novel targeted oncology platform, the Company has the goal to develop a new standard of care across multiple cancer indications.

Within these consolidated financial statements, unless the context otherwise requires, references to the Company or Aura refer to Aura Biosciences, Inc and its subsidiary on a consolidated basis.

The Company's initial focus is on ocular and urologic oncology where the disease is diagnosed early and there is a high unmet medical need.

The Company's proprietary platform enables the targeting of a broad range of solid tumors using Virus-Like Particles, or VLPs, that can be conjugated with drugs or loaded with nucleic acids to create Virus-Like Drug Conjugates, or VDCs.

The Company's VDCs are largely agnostic to tumor type and can recognize tumor associated glycosaminoglycans with unique heparan sulphate epitopes that are expressed on the cell surface of many tumor cells and in the tumor microenvironment.

Bel-sar, the Company's first VDC candidate, is being developed for the first-line treatment of early-stage choroidal melanoma, a rare disease with no drugs approved where the standard of care leaves many patients with blindness.

The Company is also developing bel-sar for additional ocular oncology indications, including choroidal metastasis, and in non-muscle invasive bladder cancer, or NMIBC.

Aura’s headquarters are located in Boston, Massachusetts.

The Company’s operations to date have consisted primarily of conducting research and development and raising capital.

5 unchanged sentences

Initial Public Offering

On November 2, 2021, the Company completed its initial public offering or the IPO, in which it issued and sold 6,210,000 shares of common stock, including the full exercise of the underwriters’

On November 2, 2021, the Company completed its initial public offering (the “IPO”), in which it issued and sold 6,210,000 shares of common stock, including the full exercise of the underwriters’

option to purchase additional shares at a price to the public of $ 14.00 per share for aggregate gross proceeds of $ 86.9 million.

The Company received approximately $ 78.3 million in net proceeds after deducting underwriting discounts, commissions and offering expenses.

Liquidity and Going Concern

Through December 31, 2021, the Company has funded its operations primarily with proceeds from the initial closing and additional closings of its convertible preferred stock financings, through its license agreements, and through its IPO.

Through December 31, 2022, the Company has funded its operations primarily with proceeds from the initial closing and additional closings of its convertible preferred stock financings, through its license agreements, through its IPO, follow-on offering and ATM transaction.

On December 5, 2022, the Company issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’

option to purchase additional shares at a price to the public of $ 12.00 per share for aggregate gross proceeds of $ 92.5 million in the Follow-On Offering.

The Company received approximately $ 86.7 million in net proceeds from the Follow-On Offering after deducting underwriting discounts, commissions and offering expenses.

On November 1, 2022, the Company filed the 2022 Shelf with the SEC in relation to the registration of up to an aggregate offering price of $ 250.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof.

The Company also simultaneously entered into the Sales Agreement with the Sales Agent to provide for the offering, issuance and sale by the Company of up to an aggregate of $ 75.0 million of common stock from time to time in the ATM under the 2022 Shelf and subject to the limitations thereof.

The Company issued 732,189 shares of common stock at an average price of $ 12.51 for aggregate gross proceeds of $ 9.2 million as of December 31, 2022.

On November 2, 2021, the Company completed its IPO, in which it issued and sold 6,210,000 shares of common stock, including the full exercise of the underwriters’

2 unchanged sentences

The Company has incurred recurring losses and negative operating cash flows from operations since its inception, including net losses of $ 58.8 million and $ 35.3 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2021, the Company had cash and cash equivalents of $ 149.1 million and an accumulated deficit of $ 152.1 million.

As of December 31, 2022, the Company had cash and cash equivalents and marketable securities of $ 188.8 million and an accumulated deficit of $ 210.9 million.

The Company expects to continue to generate operating losses for the foreseeable future.

As of the issuance date of these consolidated financial statements for the year ended December 31, 2021, the Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance of these consolidated financial statements.

As of the issuance date of these consolidated financial statements for the year ended December 31, 2022, the Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance of these consolidated financial statements.

The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

16 unchanged sentences

Cash consists of standard checking accounts.

As of December 31, 2021 and 2020, the restricted cash account is comprised of a $ 0.1 million security deposit held by the lessor for the Company’s facility lease, and a $ 0.02 million deposit that is collateral for the Company’s corporate credit card.

As of December 31, 2022, the restricted cash account is comprised of a $ 0.8 million security deposit held by the lessor for the Company’s operating lease, and a less than $ 0.1 million deposit that is collateral for the Company’s corporate credit card.

Cash Equivalents

1 unchanged sentence

Treasury obligations and government funds with commercial banks and financial institutions.

Marketable Securities

All marketable securities have original maturities greater than 90 days.

The Company has classified its investments with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations.

The Company considers its investment portfolio of marketable securities to be available-for-sale.

Accordingly, these investments are recorded at fair value.

Unrealized gains and losses are reported as the accumulated other comprehensive items in stockholders’

Amortization and accretion of premiums and discounts are recorded in other income (expense) within the consolidated statements of operations and comprehensive loss.

Realized gains or losses are included in interest income or interest expense, respectively.

If any adjustment to fair value reflects a decline in value of the investment, the Company considers all available evidence such as industry, financial inputs, and capital markets data to evaluate the extent to which the decline is other than temporary and, if so, marks the investment to market on the Company’s consolidated statement of operations and comprehensive loss.

Fair Value Measurements

23 unchanged sentences

Leasehold improvements

The shorter of the life of the leasehold improvement or the remaining term of the lease

Laboratory equipment

Office furniture

Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated in accordance with the above guidelines once placed into service.

Costs for capital assets not yet placed into service are capitalized as assets under construction and depreciated in accordance with the above guidelines once placed into service.

Upon retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss is reflected in the consolidated statements of operations and comprehensive loss.

3 unchanged sentences

If such asset is considered to be unrecoverable, the impairment recognized is measured by the difference between the estimated fair value of the asset and its carrying value.

The Company did not recognize any material impairments during the years ended December 31, 2021 or 2020.

The Company did not recognize any impairments during the years ended December 31, 2022 or 2021.

Research and Development

8 unchanged sentences

Amounts incurred are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss.

Prior to January 1, 2021, the Company accounted for leases in accordance with ASC 840, Leases ("ASC 840").

At lease inception, the Company determined if an arrangement was an operating or capital lease.

For operating leases, the Company recognized rent expense, inclusive of rent escalation, holidays and lease incentives, on a straight-line basis over the lease term.

The difference between rent expense recorded and the amount paid was charged to deferred rent.

The Company presented lease incentives as deferred rent and amortized the incentives as a reduction to rent expense on a straight-line basis over the lease term.

The Company classified deferred rent as current and noncurrent liabilities based on the portion of the deferred rent that was scheduled to mature within the proceeding twelve months.

Effective January 1, 2021, the Company accounts for leases in accordance with ASU No.

5 unchanged sentences

The Company adopted the new leasing standard effective January 1, 2021 , using the modified retrospective transition approach which uses the effective date, or January 1, 2021, as the date of initial application.

As a result, prior periods are presented in accordance with the previous guidance in ASC 840.

ASC 842 provides several optional practical expedients in transition.

25 unchanged sentences

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process preferred stock or common stock financings as deferred offering costs until such financings are consummated.

After the closing of the IPO, these costs were recorded in stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering.

Convertible Preferred Stock Classification

The Company records all convertible preferred stock upon issuance at its respective fair value or original issuance price less issuance costs.

The Company classifies its convertible preferred stock outside of stockholders’

deficit as the redemption of such shares is outside the Company’s control.

The Company does not adjust the carrying values of the convertible preferred stock to redemption value unless and until it becomes probable that the instrument will become redeemable.

As of December 31, 2020, the Company’s convertible preferred stock was no t adjusted to redemption value.

After the closing of the IPO, all of the Company's outstanding shares of convertible preferred stock automatically converted into shares of common stock.

After the closing of the IPO, follow-on offering and the ATM draw downs, these costs were recorded in stockholders' equity as a reduction of additional paid-in capital generated as a result of the financings.

Stock-Based Compensation

39 unchanged sentences

The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s cash compensation costs are classified.

The Company accounts for warrants on capital stock based on guidelines provided in ASC Topic 815, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815”), which provides guidance on contracts that are settled in the Company’s own shares as either a liability or as an equity instrument depending on the warrant agreement.

The Company's warrants are all classified as equity instruments.

As such, the Company uses the Black-Scholes pricing model, depending on the applicable terms of the warrant agreement, to value the warrants.

Net Loss per Share

3 unchanged sentences

The participating securities do not include a contractual obligation to share in losses of the Company and are not included in the calculation of net loss per share in the periods that have a net loss.

Diluted net income per share is computed using the more dilutive of (a) the two-class method, or (b) the if-converted method.

Diluted net income per share is computed using the if-converted method.

The Company allocates earnings first to preferred stockholders based on dividend rights and then to common and preferred stockholders based on ownership interests.

1 unchanged sentence

Common stock equivalent shares are excluded from the computation of diluted loss per share if their effect is antidilutive.

The Company’s convertible preferred stock contractually entitles the holders of such shares to participate in dividends.

Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities.

In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The Company reported a net loss attributable to common stockholders for the years ended December 31, 2021 and 2020, respectively.

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

For the years ended December 31, 2021 and 2020, comprehensive loss was equal to net loss.

Recently Adopted Accounting Pronouncements

Upon adoption of ASC 842, the Company recorded lease liabilities and their corresponding right-of-use assets based on the present value of lease payments over the remaining lease term.

The adoption of ASC 842 resulted in the recognition of operating lease liabilities of $ 0.6 million and operating lease right-of-use assets of $ 0.5 million and the derecognition of deferred rent liabilities of $ 0.02 million on the Company’s consolidated balance sheet as of January 1, 2021.

The adoption impact relates to the Company’s existing operating lease for operating and laboratory space.

The adoption of ASC 842 did not have a material impact on the Company’s consolidated statements of operations and comprehensive loss or consolidated statements of cash flows.

Recently Issued Accounting Pronouncements Not Yet Adopted

The Company reviewed recently issued accounting pronouncements for the year end December 31, 2021 and noted no pronouncements would have a material impact on the Company's consolidated financial statements.

The Company assessed the recent accounting pronouncements for the year ended December 31, 2022 and determined no pronouncements have material impact to the consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments,”

which was subsequently amended in November 2018 through ASU No.

2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses.”

2016-13 will require entities to estimate lifetime expected credit losses for trade and other receivables, net investments in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses.

Further, the new credit loss model will affect how entities in all industries estimate their allowance for losses for receivables that are current with respect to their payment terms.

2018-19 further clarifies that receivables arising from operating leases are not within the scope of Topic 326.

Instead, impairment from receivables of operating leases should be accounted for in accordance with Topic 842, Leases.

As per the latest ASU 2020-02, FASB deferred the timelines for certain small public and private entities, thus the new guidance will be adopted by the Company for the annual reporting period beginning January 1, 2023, including interim periods within that annual reporting period.

The standard will apply as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.

The Company does not expect adoption of this new guidance to have a material impact on its results of operations, financial condition, and financial statement disclosures.

Fair Value of Assets and Liabilities

3 unchanged sentences

for identical

Financial assets

Cash equivalents:

Money market funds

Marketable securities:

Commercial paper

Corporate bonds

Government agencies

Total financial assets

Warrant Liability

Total financial liabilities

Quoted prices

1 unchanged sentence

for identical

Warrant Liability

Total financial liabilities

At December 31, 2021, the fair value of the warrant liability was determined based on Level 3 inputs and utilizing the Black-Scholes option pricing model (see Note 10).

During the years ended December 31, 2021 and 202 0 , there were no transfers into or out of Level 3.

The following table set forth a summary of changes in the fair value of the common stock warrants, which represents a recurring fair value measurement that is classified within Level 3 of the fair value hierarchy.

Changes in fair value are recognized in other (expense) income as “Change in fair value of warrant liability”

in the Company’s consolidated statements of operations and comprehensive loss (in thousands):

Common Stock ( 12,686 warrants)

Fair value at December 31, 2019

Change in fair value

Fair value at December 31, 2020

Change in fair value

Fair value at December 31, 2021

Financial assets

Cash equivalents:

Money market funds

Total financial assets

There have been no transfers between levels for the years ended December 31, 2022 and 2021.

Property and Equipment, Net

At December 31, 2021 and 2020, property and equipment consisted of the following (in thousands):

P roperty and equipment, net, consisted of the following (in thousands):

Year Ended December 31,

Assets under construction

4 unchanged sentences

Property and equipment, net

For the years ended December 31, 2021 and 2020, depreciation expense was $ 0.8 million.

Depreciation expense was $ 1.2 million and $ 0.8 million for the years ended December 31, 2022 and 2021, respectively.

Prepaid Expenses and Other Current Assets

At December 31, 2021 and 2020, prepaid expenses and other current assets consisted of the following (in thousands):

P repaid expenses and other current assets consisted of the following (in thousands):

Year Ended December 31,

Prepaid insurance

2 unchanged sentences

Prepaid expenses and other current assets

Marketable Securities

Marketable securities consist of the following (in thousands):

Amortized Cost

Unrealized Gains

Unrealized Losses

Commercial paper

Corporate bonds

Government agencies

As of December 31, 2022, the unrealized losses on the Company’s investments in U.S.

government agencies securities and corporate bonds were caused by interest rate increases.

The current credit ratings are all within the guidelines of the investment policy of the Company and the Company does not expect the issuers to settle any security at a price less than the amortized cost basis of the investment.

The Company does not intend to sell the investments and it is not probable that the Company will be required to sell the investments before recovery of their amortized cost basis.

As of December 31, 2022, $ 0.1 million unrealized losses were associated with marketable securities with contractual maturities of one year or less.

As of December 31, 2022, all marketable securities held by the Company had remaining contractual maturities of one year or less, except for corporate bonds and U.S.

government agencies securities with a fair value of $ 4.2 million that had maturities of one to two years.

There were no impairments of the Company’s assets measured and carried at fair value during the year ended December 31, 2022.

Accrued Expenses and Other Current Liabilities

At December 31, 2021 and 2020, accrued expenses and other current liabilities consisted of the following (in thousands):

A ccrued expenses and other current liabilities consisted of the following (in thousands):

Year Ended December 31,

Accrued research and development expenses

1 unchanged sentence

Accrued expenses and other current liabilities

Convertible Preferred Stock

As of December 31, 2020, the Company had 1,701,141 authorized, issued and outstanding shares of Series A convertible preferred stock, 3,298,732 authorized, issued and outstanding shares of Series A-1 convertible preferred stock, 4,325,021 authorized shares and 4,324,998 issued and outstanding shares of Series A-2 convertible preferred stock and, 22,705,646 authorized shares and 22,531,819 issued and outstanding shares of Series B convertible preferred stock, 58,109,711 authorized, issued and outstanding shares of Series C-1 convertible preferred stock, 33,218,192 authorized, issued and outstanding shares of Series C-2 convertible preferred stock, 57,878,742 authorized, issued and outstanding shares of Series D-1 convertible preferred stock and 24,598,481 authorized shares and 14,469,710 issued and outstanding shares of Series D-2 convertible preferred stock.

All series of convertible preferred stock are collectively referred to as Preferred Stock, each with a par value of $ 0.00001 per share.

Series D-2 Offering

On June 25, 2020, the Company entered into the Series D-2 Purchase Agreement (the "Series D-2 Agreement”) with certain investors to sell up to 24,598,481 shares of Series D-2 convertible preferred stock at a purchase price of $ 0.6911 per share.

The Series D-2 Agreement provides for two closings, the first on October 1, 2020 and the second upon the achievement or waiver of certain milestone events.

The Company sold 14,469,710 shares of the Series D-2 convertible preferred stock on October 1, 2020 at the first tranche closing for gross proceeds of $ 10.0 million.

On March 5, 2021, the Company completed the second tranche of the Series D-2 convertible preferred stock offering and issued 10,128,771 shares of the Series D-2 convertible preferred stock, $ 0.00001 par value per share, at a purchase price of $ 0.6911 per share for gross proceeds of $ 7.0 million.

Costs incurred in connection with the Series D-2 convertible preferred stock offering totaled $ 0.1 million and were recorded as a reduction to the Series D-2 convertible preferred stock.

The majority of offering costs were incurred during the year ended December 31, 2020.

Offering costs incurred during the year ended December 31, 2021 was $ 0.02 million.

The Company evaluated the tranche rights pursuant to the Series D-2 Agreement and determined the tranche rights did not represent a freestanding financial instrument as they are not legally detachable from the Series D-2 convertible preferred stock issued in the first tranche.

As of December 31, 2021, all the Series D-2 convertible preferred stock have been converted to shares of common stock upon closing of the IPO.

Series E Offering

On March 18, 2021, the Company completed its Series E Stock offering and issued 102,671,041 shares of Series E convertible preferred stock, $ 0.00001 par value per share, at a purchase price of $ 0.7839 per share for gross proceeds of $ 80.5 million.

Costs incurred in connection with the Series E convertible preferred stock offering totaled $ 0.2 million during the year ended December 31, 2021 and were recorded as a reduction to Series E convertible preferred stock.

As of December 31, 2021, all Series E convertible preferred stock have been converted to shares of common stock upon closing of the IPO.

The rights and privileges of the Company’s Preferred Stock for the year ended December 31, 2020, and the period January 1, 2021 through November 2, 2021, are as follows:

Except as otherwise required by law or by other provisions, holders of the Preferred Stock vote together with the holders of common stock as a single class.

Holders of Preferred Stock may cast the number of votes equal to the number of shares of common stock to which such shares of Preferred Stock are convertible into.

Series C, D and E Dividend:

From and after the date of the issuance of any shares of Series C-1, Series C-2, Series D-1, Series D-2, and Series E, dividends at the annual rate of seven percent ( 7 %) per annum of the original share price per share accrue on such shares of Series C-1, Series C-2, Series D-1, Series D-2, and Series E.

Dividends accrue from day to day, whether or not declared, and are cumulative, but not compounding.

Such dividends are only payable when and if declared by the Board or in the event of a Deemed Liquidation Event (as defined in the amended and restated Certificate of Incorporation).

No other dividends may be declared or paid on any other class of stock unless the holders of the shares of Series E then outstanding first receive, or simultaneously receive, their applicable dividend.

For the year ended December 31, 2020, $ 5.9 million, $ 2.6 million, $ 3.9 million, and $ 0.2 million of cumulative dividends on Series C-1, Series C-2, Series D-1, and Series D-2, respectively, are included in the liquidation preference amount indicated on the consolidated balance sheet.

For the year ended December 31, 2020, there were no Series E convertible preferred stock shares issued or outstanding.

Series B Dividends:

From and after the date of the issuance of any shares of Series B, dividends at the annual rate of $ 0.0869645 per share accrue on such shares of Series B.

Dividends accrue from day to day, whether or not declared, and are cumulative, but not compounding.

Such dividends are only payable when and if declared by the Company’s Board or in the event of a Deemed Liquidation Event (as defined in the amended and restated Certificate of Incorporation).

No other dividends may be declared or paid on any other class of stock unless the holders of the shares of Series B then outstanding first receive, or simultaneously receive, their applicable dividend.

For the year ended December 31, 2020, $ 9.4 million of cumulative dividends on Series B are included in the liquidation preference amount indicated on the consolidated balance sheet.

Series A Dividends:

From and after the date of the issuance of Series A, Series A-1, and Series A-2, if the Company declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock of the Company, the dividend payable to the holders of Series A, Series A-1, and Series A-2 convertible preferred stock shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest dividend.

No other dividends, or dividends on common stock payable in shares of common stock, may be declared or paid unless the holders of Series A, Series A-1, and Series A-2 then outstanding first receive, or simultaneously receive, their applicable dividend.

As of December 31, 2020, no dividends have been declared on the common stock or the convertible preferred stock.

Liquidation Rights

In the event of a Deemed Liquidation Event, as defined in the Company’s amended and restated Certificate of Incorporation, the assets of the Company will be distributed first to the holders of Series E convertible preferred stock.

The holders of Series E convertible preferred stock will receive, in preference to all other stockholders, and amount equal to the sum of the Series E original issue price (equal to the cash price paid per share of $ 0.783900 ), plus unpaid dividends on such shares.

Next, the holders of Series D convertible preferred stock will receive, in preference to all other stockholders other than Series E, an amount equal to the sum of the Series D original issue price, plus unpaid dividends on such shares.

Next, the holders of Series C will receive, in preference to all stockholders other than the Series E and D convertible preferred stock holders, an amount equal to the sum of the Series C original issue price plus unpaid dividends on such shares.

Next, the holders of Series B will receive, in preference to the holders of Series A, Series A-1, Series A-2 and common stock, an amount equal to the sum of the Series B original issue price plus unpaid dividends on such shares.

Next, the holders of Series A, Series A-1, and Series A-2 will receive, in preference to the holders of common stock, an amount equal to the greater of their applicable liquidation preference or what they would have received had their shares converted into common stock.

If the proceeds available are not sufficient to satisfy the full liquidation preference, the entire proceeds are to be distributed pro-rata among the Series E convertible preferred stock holders in proportion to the full preferential amount the Series E convertible preferred stock holders are entitled to receive.

The Series E, together with the Series D, the Series C and the Series B convertible preferred stock, collectively the "Senior Preferred Stock", c onverts into common stock on a one-for-one basis .

Each share of Series B, Series C-1, Series C-2, Series D-1, Series D-2, and Series E convertible preferred stock is convertible into the number of shares of common stock as is determined by dividing the respective original issue price by the conversion price in effect at the time of conversion.

The Series E conversion price is set at $ 0.7839 per share, the Series D-1 and Series D-2 conversion price is set at $ 0.6911 per share, the Series C-1 conversion price is set at $ 0.5213 per share, the Series C-2 conversion price is set at $ 0.36491 per share, and the Series B conversion price is set at $ 1.24235 per share;

none represents a beneficial conversion feature.

Subject to certain exceptions, the Senior Preferred Stock has the benefit of anti- dilution protection on a weighted-average basis in the event that the Company sells stock at less than the applicable conversion price per share.

Each share of Series A and Series A-1 was originally convertible into the number of shares of common stock determined by dividing the respective Series A and Series A-1 original issue price by the conversion price in effect at the time of conversion.

The Series A conversion price was originally equal to $ 2.00 per share and the Series A-1 conversion price was originally equal to $ 2.4847 per share.

As Series A-2 was sold at $ 1.24235 per share, less than the per share prices of Series A and Series A-1, anti-dilution protections were triggered.

Pursuant to the anti-dilution protection terms, on February 24, 2015, the Series A conversion price was reduced from $2.00 to $ 1.8191 per share of common stock and the Series A-1 conversion price was reduced from $2.4847 to $ 2.1898 per share of common stock and, therefore, the Series A conversion ratio was changed from 1:1 to 1:

1.099 and the Series A-1 conversion ratio was changed from 1:1 to 1:

The Company evaluated Series A and Series A-1 with the updated conversion ratios and determined that there was no beneficial conversion feature.

Series A-2 converts into common stock on a one-for- one basis.

The Series A-2 conversion price is set at $ 1.24235 per share and does not represent a beneficial conversion feature.

According to the terms of the Company’s amended and restated Certificate of Incorporation, in the event that the applicable conversion price for any series of Senior Preferred Stock is reduced, then the applicable conversion price for each series of Series A convertible preferred stock shall be uniformly and concurrently reduced.

Each share of Preferred Stock will automatically convert into common stock upon (a) the occurrence of an event, specified by vote or written consent of certain stockholders or (b) the completion of a public stock offering involving a price per share of common stock of not less than $ 1.554975 per share, subject to certain adjustments, where such offering results in aggregate gross proceeds to the Company of at least $ 50.0 million and the common stock is listed for trading on either the New York Stock Exchange or the Nasdaq Stock Market.

The Company must reserve and keep available out of its authorized but unused capital stock such number of authorized shares of common stock to sufficiently effect the conversion of all outstanding Preferred Stock.

In considering the features of the convertible preferred stock, the Company determined that none of the features, including the conversion features, requires bifurcation during the year ended December 31, 2020.

The conversion ratios for the Series A stock was changed to 13.700 to 1.099 , Series A-1 stock was changed to 13.7 to 1.135 , and the Series A-2 stock through Series E stock was changed to 13.7 to 1 upon the Company’s filing of its amendment to its amended and restated Certificate of Incorporation on October 22, 2021.

The Company had 150,000,000 authorized shares of common stock, par value $ 0.00001 per share, of which 37,771,918 and 29,211,643 shares were issued and outstanding at December 31, 2022 and 2021, respectively.

Upon closing of the IPO on November 2, 2021, all of the Company's outstanding shares of convertible preferred stock automatically converted into 22,550,561 shares of common stock.

In addition, the Company authorized 10,000,000 shares of preferred stock, par value $ 0.00001 per share, all of which shares of preferred stock will be undesignated.

C ommon Stock

The Company has 150,000,000 and 232,697,999 authorized shares of common stock, par value $ 0.00001 per share, of which 29,211,643 and 381,123 shares were issued and outstanding as of December 31, 2021 and 2020, respectively.

On December 5, 2022, the Company issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’

option to purchase additional shares at a price to the public of $ 12.00 per share for aggregate gross proceeds of $ 92.5 million (the “Follow-On Offering”).

The Company received approximately $ 86.7 million in net proceeds from the Follow-On Offering after deducting underwriting discounts, commissions and offering expenses.

On November 1, 2022, the Company filed a shelf registration statement on Form S-3 (the “2022 Shelf”) with the SEC in relation to the registration of up to an aggregate offering price of $ 250.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof.

The Company also simultaneously entered into the Open Market Sale Agreement SM (the “Sales Agreement”) with Jefferies LLC (the “Sales Agent”) to provide for the offering, issuance and sale by the Company of up to an aggregate of $ 75.0 million of common stock from time to time in “at-the-market”

offerings (the “ATM”) under the 2022 Shelf and subject to the limitations thereof.

The Company issued 732,189 shares of common stock at an average price of $ 12.51 for aggregate gross proceeds of $ 9.2 million as of December 31, 2022 under the Sales Agreement.

Stock-Based Compensation

4 unchanged sentences

Under the 2018 Plan, Aura may grant incentive stock options, non-qualified stock options, restricted and unrestricted stock awards and stock right.

The Board has determined not to make any further awards under the 2018 Plan as of November 2, 2021.

The Board of Directors (the "Board") has determined not to make any further awards under the 2018 Plan as of November 2, 2021.

However, the 2018 Plan will continue to govern outstanding equity awards granted thereunder.

2021 Stock Option and Incentive Plan

The 2021 Stock Option and Incentive Plan, (the "2021 Plan"), was adopted by the Board on October 7, 2021, approved by the Company’s stockholders on October 22, 2021 and became effective on November 1, 2021.

The 2021 Stock Option and Incentive Plan, or the 2021 Plan, was adopted by the Board on October 7, 2021, approved by the Company’s stockholders on October 22, 2021 and became effective on November 1, 2021.

The 2021 Plan permits the granting of both options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Code and options that do not so qualify.

The number of shares initially reserved for issuance under the 2021 Plan was 3,352,166 , which will automatically increase on January 1, 2022 and each January 1 thereafter, by 5 % of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee.

The number of shares initially reserved for issuance under the 2021 Plan was 3,352,166 , which increased on January 1, 2022 and will continue to increase each January 1 thereafter, by 5 % of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee.

The maximum number of shares of common stock that may be issued in the form of incentive stock options shall not exceed the initial limit, cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the annual increase for such year or 3,352,166 shares of common stock.

On January 1, 2022, the shares reserved for issuance was increased to 4,812,748 shares.

2021 Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan, (the "ESPP"), was adopted by the Board on October 7, 2021, approved by the Company’s stockholders on October 22, 2021 and became effective on November 1, 2021.

A total of 335,217 shares of common stock were initially reserved for issuance under this plan, which will automatically increase on January 1, 2022 and each January 1 thereafter through January 1, 2031, by the least of (i) 335,217 shares of common stock, (ii) 1 % of the outstanding number of shares of common stock on the immediately preceding December 31 or (iii) such lesser number of shares of common stock as determined by the administrator of the ESPP.

On March 18, 2021, the Board approved an increase to the 2018 Plan available option pool of 2,346,228 options.

As mentioned above, the 2021 Plan was initiated in November 2021.

The 2021 Employee Stock Purchase Plan, or the ESPP, was adopted by the Board on October 7, 2021, approved by the Company’s stockholders on October 22, 2021 and became effective on November 1, 2021.

A total of 335,217 shares of common stock were initially reserved for issuance under this plan, which increased on January 1, 2022 and will continue to increase each January 1 thereafter through January 1, 2031, by the least of (i) 335,217 shares of common stock, (ii) 1 % of the outstanding number of shares of common stock on the immediately preceding December 31 or (iii) such lesser number of shares of common stock as determined by the administrator of the ESPP.

On January 1, 2022, the shares reserved for issuance was increased to 627,333 shares.

The purchase price of the shares under the ESPP are at 85 % of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the purchase date.

As of December 31, 2022, 627,333 shares were available to be issued under the ESPP.

The Company recognized $ 0.02 million share-based compensation expense related to the ESPP for the year ended December 31, 2022.

Stock Options

With the transfer of the available options from the 2018 Plan to the 2021 Plan, there were 3,387,895 options available for grant under the 2021 Plan at December 31, 2022.

9 unchanged sentences

The Board or any committee to which the Board delegates authority may, with the consent of the affected plan participants, re-price or otherwise amend outstanding awards consistent with the terms of the 2021 Plan.

The following table summarizes stock option activity under the 2021 Plan for the year ended December 31, 2021:

The following table summarizes stock option activity under the 2018 Plan and 2021 Plan for the year ended December 31, 2022:

Aggregate Intrinsic

(in thousands)

Outstanding at December 31, 2021

2 unchanged sentences

Exercisable at December 31, 2022

Unvested as of December 31, 2021

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2022 and 2021 was $ 10.79 and $ 5.84 per share, respectively.

The total intrinsic value of options exercised was $ 0.8 million and $ 0.1 million for the years ended December 31, 2022 and 2021, respectively.

The Company has elected to use the Black-Scholes option pricing model to determine the fair value of options granted and generally recognizes the compensation cost of stock-based awards on a straight-line basis over the vesting period of the award.

The determination of the fair value of stock-based payment awards utilizing the Black-Scholes option pricing model is affected by the fair value of the Company’s common stock and a number of other assumptions, including expected volatility, expected life, risk-free interest rate, and expected dividends.

The fair value of the stock options issued as of December 31, 2022 and 2021 was measured with the following weighted-average assumptions:

Year Ended December 31,

Risk-free interest rate

Expected term

Expected term (years)

Expected volatility of the underlying stock

1 unchanged sentence

Restricted Stock Units

The Company has granted restricted stock units with service vesting based conditions.

The Company has granted restricted stock units with service-based vesting conditions.

Unvested shares of restricted common stock may not be sold or transferred by the holder.

They are legally issued and outstanding.

These restrictions lapse accordingly to the time-based vesting of each award.

A summary of the restricted stock unit activity during the year ended December 31, 2022 is as follows:

1 unchanged sentence

Grant Date Fair Value

Granted at December 31, 2020

Granted at December 31, 2021

Unvested at December 31, 2021

Vested/Released

Unvested at December 31, 2022

As a result of the 2021 Equity Incentive Plan, the Company granted restricted stock units which vest in increments of 25 % annually over a period of four years .

No restricted stock units vested during the year ended December 31, 2021.

During the year ended December 31, 2022, 51,444 restricted stock units vested with a fair value of $ 0.7 million.

Stock-based Compensation Expense

The Company recorded stock-based compensation as follows (in thousands):

The Company recorded stock-based compensation expense as follows (in thousands):

Year Ended December 31,

6 unchanged sentences

Each Series B Warrant was immediately exercisable and expires ten years from the original date of issuance.

Pursuant to FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Series B Warrants were classified as a liability and are re-measured to fair value at each balance sheet date and immediately prior to exercise.

The Series B Warrants were converted into warrants to purchase 12,686 shares of common stock upon the completion of the IPO in November 2021.

A total of 12,686 of the common stock warrants remained outstanding at December 31, 2021 and 2020.

The warrants were valued using the Black-Scholes option pricing model.

The fair value of the warrants and the significant assumptions used were as follows:

Common Stock Warrants

Expected term (years)

Risk free rate

Dividend yield

Pursuant to FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Series B Warrants were classified as a liability and were re-measured to fair value at each balance sheet date.

A total of 173,827 of the Series B Warrants were outstanding and were converted into warrants to purchase 12,686 shares of common stock with an exercise price of $ 17.03 upon the completion of the IPO in November 2021.

As a result, the 12,686 common stock warrants were converted into equity instruments and remain outstanding as of December 31, 2022 .

In January 2012, the Company adopted the Aura Biosciences 401(k) Profit Sharing Plan and Trust (the “401(k) Plan”) for its employees, which is designed to be qualified under Section 401(k) of the Internal Revenue Code.

5 unchanged sentences

The Company has historically entered into lease arrangements for its facilities.

As of December 31, 2021 and 2020, respectively, the Company had one operating lease for its office and laboratory facility with required future minimum payments.

The lease does not contain any options to renew, terminate, or purchase the underlying asset, and was set to expire on July 31, 2022 .

As part of its adoption of ASC 842, the Company recorded a right-of-use asset and operating lease liability for this lease as of the effective date.

On March 31, 2021, the Company executed an amendment to the facility lease which included an extension of the expiration date of the original leased premises, the addition of 4,516 square feet of laboratory space with an expected commencement date of May 1, 2021 , and the addition of 1,000 square feet of laboratory space with an expected commencement date of June 15, 2021 .

The Company has one operating lease for its office and laboratory facility with required future minimum payments as of December 31, 2022 and one operating lease that was terminated in August 2022.

On March 31, 2021, the Company executed an amendment to the previous facility lease in Cambridge, MA which included an extension of the expiration date of the original leased premises, the addition of 4,516 square feet of laboratory space with a commencement date of May 1, 2021 , and the addition of 1,000 square feet of laboratory space with a commencement date of June 15, 2021 .

The lease term for the original and new spaces will expire on July 31, 2023 , with an option to renew for an additional 12 months .

3 unchanged sentences

The Company remeasured the lease liability and corresponding right-of-use asset for the original space as of the effective date of the amendment to reflect the extended term and recorded in the second quarter of 2021 an additional right-of-use asset and lease liability upon lease commencement of each of the additional space.

The Company also leases office and laboratory equipment for which the related expense is immaterial.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s leases for the year ended December 31, 2021 (in thousands):

December 31, 2021

In August 2022, the Company entered into a termination agreement with the landlord to the end this lease effective August 31, 2022, which resulted in the Company paying the landlord a termination expense of $ 0.3 million.

The Company recognized a loss on the lease of $ 0.3 million which was recorded as a loss on disposal of assets on the statements of operations and comprehensive loss and derecognized $ 0.6 million in lease liabilities and corresponding right-of-use asset on the balance sheets.

On May 16, 2022, the Company entered into an office and laboratory lease in Boston, MA with an initial 10-year term and one renewal option to extend the lease for an additional seven years .

The lease commenced on August 1, 2022 , and estimated payments due under the initial term total $ 35.2 million.

The lease requires a letter of credit totaling $ 0.8 million which is classified as long-term restricted cash and deposits on the consolidated balance sheet.

The landlord will reimburse the Company up to $ 0.5 million for certain costs related to expansion of the laboratory space.

As of December 31, 2022, the Company has incurred $ 0.1 million of expenses related to the expansion.

The Company also leases office equipment for which the related expense is immaterial.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s leases for the years ended December 31, 2022 and 2021 (in thousands):

Year Ended December 31,

Amortization of finance right-of-use assets

4 unchanged sentences

Cash paid for amounts included in the measurement of lease liability—finance leases

Cash paid for amounts included in the measurement of lease liability—operating leases

Cash paid for amounts included in the measurement of lease liabilities—operating leases

Weighted-average remaining lease term—operating leases (years)

7 unchanged sentences

Lease liabilities, net of current portion

In May 2021, the Company paid in full its finance lease.

Laser Purchasing Commitment

On April 5, 2019, the Company entered into a purchase agreement for equipment with future commitments payable in three installments of €

0.2 million each.

The first two installments of €

0.2 million were paid by the Company in April 2019 and August 2019.

Upon receipt of the laser systems, the Company will assess whether the laser systems have an alternative future use and, if so, will capitalize the lasers as a component of fixed assets.

License Agreements

6 unchanged sentences

The term of the LI-COR Exclusive Agreement expires on a country-by-country basis, until the longer of (i) ten years from the first commercial sale of a licensed product in such country and (ii) the last to expire valid claim in such country.

For the years ended December 31, 2021, and December 31, 2020, the Company incurred, respectively, $ nil and $ 0.1 million of expenses related to this agreement.

The Company recognized no expenses related to this agreement and related amendments for the years ended December 31, 2022 and 2021.

LI-COR Non-Exclusive License and Supply Agreement

5 unchanged sentences

The 2014 Non-Exclusive Agreement also required the Company to make certain payments upon the achievement of specified development and commercial milestones of up to $ 0.4 million in aggregate.

During the years ended December 31, 2022 and 2021, the Company recognized immaterial milestones related to this agreement.

Life Technologies Corporation

In December 2014, the Company entered into a non-exclusive, perpetual license agreement with Life Technologies Corporation (“Life Technologies”), which allows for five licensed products.

Under this agreement the Company is required to pay an initial license fee of $ 0.1 each product.

In December 2014, the Company entered into a non-exclusive, perpetual license agreement with Life Technologies Corporation, or the Life Technologies, which allows for five licensed products.

Under this agreement the Company is required to pay an initial license fee of $ 0.1 million for each product.

An annual development fee of $ 0.1 million is due within a year from payment of the initial license fee and due annually or earlier of (i) payment of a commercialization fee or (ii) all development work is terminated.

1 unchanged sentence

In the event of a change of control, there will be a change of control fee of $ 0.2 million.

For the years ended December 31, 2021 and December 31, 2020, the Company incurred $ 0.1 million of expenses related to this agreement.

In January 2022, the Company entered into the First Amendment to the non-exclusive, perpetual license agreement with Life Technologies for use of the license in an additional indication.

The cost of this amendment was a one-time fee of $ 0.05 million.

During the years ended December 31, 2022 and 2021, the Company recognized $ 0.05 million and $ 0.1 million of expenses related to this agreement, respectively.

Effective in September 2022, the Company entered into a new non-exclusive, perpetual license agreement with Life Technologies for licensed products.

Under this agreement, the Company is required to pay an initial license fee of $ 0.4 million for the first licensed product and $ 0.5 million for each additional licensed product.

In addition, the agreement allows the Company the right to sublicense which would lead to a $ 0.2 million payment for each sublicense per licensed product and a $ 0.03 million payment for use of the cell line document package.

In the event of a change of control, there will be a change of control fee of $ 0.5 million.

During the year ended December 31, 2022, the Company recognized $ 0.4 million of expenses related to this agreement.

National Institute of Health (NIH)-Biologic Materials License Agreement

8 unchanged sentences

This agreement was first amended in 2012, 2013, 2014, 2015, 2016, 2018 and most recently in September of 2020.

During 2011-2021, the Company paid an aggregate of $ 0.4 million in research collaboration fees, $ 0.03 million and 0.04 million of which was paid in 2021 and 2020, respectively.

During the years ended December 31, 2022 and 2021, the Company paid $ nil million and $ 0.03 million of research collaboration fees related to this agreement.

A seventh amendment was made in October 2020, requiring payment of $ 0.04 million within 30 days of October 1, 2020, and another $ 0.03 million within 30 days of the 10th anniversary of the CRADA, which was paid in July 2021.

This seventh amendment extended the term of the CRADA to September 30, 2022.

The Company recognized no milestones related to this agreement and related amendments for the years ended December 31, 2022 and 2021.

An eighth amendment was effective in September 2022, requiring payment of $ 0.04 million within 30 days of November 1, 2022, and payment of another $ 0.03 million within 30 days of the 12th anniversary of the CRADA, which will be in August 2023.

This eighth amendment extended the term of the CRADA to September 30, 2024.

During the year ended December 31, 2022, the Company recognized $ 0.1 million of expenses related to this agreement.

National Institute of Health (NIH)-Exclusive Patent License Agreement

4 unchanged sentences

Additionally, the Company’s payment obligations to the NIH are subject to an annual minimum royalty payment of low five figures.

As of December 31, 2021, the Company has paid NIH approximately $ 0.4 million in aggregate milestones under the NIH license agreement.

The Company accrued $ 0.03 million and $ 0.02 million in patent licensing reimbursement fees as of December 31, 2021, and 2020, respectively.

The Company recognized $ 0.02 million and $ 0.03 million for patent licensing fees for the years ended December 31, 2022 and 2021, respectively.

In 2015, 2018 and 2019, the Company amended its exclusive patent license to include updates on the status of the commercial development and update/expand the list of licensed patents and patent applications.

3 unchanged sentences

The agreement expires on a country by country basis based on the last to expire any patent encompassed within the scope of the patent rights or 10 years from the date of the first commercial sales by the Company, whichever is later.

There are potential milestone The IND filing milestone of €

The IND filing milestone of €

0.01 million was accrued in 2016 and paid in 2017 by the Company.

10 unchanged sentences

The Clearside License agreement expires on a country-by-country basis upon the later of the last to expire patent or ten years from the date of the first commercial sale of a product.

The Company recognized no expenses related to this agreement and related amendments for the years ended December 31, 2022 and 2021.

Net Loss Per Share

1 unchanged sentence

Diluted net loss per share is the same as basic net loss per share for the periods presented since the effects of potentially dilutive securities are antidilutive given the net loss of the Company.

The Company has calculated basic and diluted loss per share for the years ended December 31, 2021 and 2020 as follows (in thousands, except share and per share data):

The Company has calculated basic and diluted net loss per share for the years ended December 31, 2022 and 2021 as follows (in thousands, except share and per share data):

Year Ended December 31,

Accruals of dividends of preferred stock

3 unchanged sentences

The following potentially dilutive securities were excluded from the computation of the diluted net loss per share for the periods presented because their effect would have been antidilutive:

Convertible preferred stock on an if converted basis

Year Ended December 31,

Stock options to purchase common stock

Restricted stock units that vest into common stock

Warrants to purchase preferred stock

Warrants to purchase common stock

14 unchanged sentences

Stock-based compensation expense

Capitalized research and development expenses

Tax credit carryforwards

5 unchanged sentences

Depreciable assets

Accrued expenses

Valuation allowance

1 unchanged sentence

As of December 31, 2022, the Company had federal gross operating loss carryforwards of approximately $ 155.1 million which may be available to offset future taxable income, of which $ 44.2 million begin to expire in 2029 and go through 2037 and $ 110.9 million do not expire.

The Company had state gross operating loss carryforwards of $ 113.6 million, which may be available to offset future taxable income and which would begin to expire in 2030 .

The Company had state gross operating loss carryforwards of $ 127.5 million, which may be available to offset future taxable income and which would begin to expire in 2030 , except for $ 0.7 million of state NOLs that do not expire.

As of December 31, 2022, the Company had federal and state research and experimentation credit carryforwards of $ 6.4 million and $ 1.9 million, respectively, which may be available to offset future income tax liabilities and which would begin to expire in 2029 and 2028 , respectively.

11 unchanged sentences

A full valuation allowance has been provided against the Company’s research and development credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance.

Thus, there would be no impact to the consolidated balance sheet or consolidated statement of operations and comprehensive loss at this time, if an adjustment were required.

Thus, there would be no impact to the balance sheet or statement of operations at this time, if an adjustment were required.

Management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are principally comprised of NOL carryforwards and tax credit carryforwards.

Management has determined that it is more likely than not that the Company will not realize the benefits of its deferred tax assets, and as a result, a valuation allowance of $ 60.0 million has been recorded at December 31, 2022.

The increase in the valuation allowance of $ 9.9 million during the year ended December 31, 2021 was primarily due to the increase in net operating loss generated by the Company.

The increase in the valuation allowance of $ 16.8 million during the year ended December 31, 2022 was primarily due to the increase in net operating loss generated by the Company and capitalized R&D expenses related to the new Section 174 requirements.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures currently and requires taxpayers to amortize them, over five years for domestically incurred expenditures and over fifteen years for foreign incurred expenditures, pursuant to Internal Revenue Code Section 174.

As of December 31, 2022, the Company has recorded a gross deferred tax asset of $ 39.0 million related to the Capitalized IRC Section 174 expenditures.

As of December 31, 2022 and 2021, the Company had no unrecognized tax benefits.

3 unchanged sentences

Since the Company is in a loss carryforward position, it is generally subject to examination by federal and state tax authorities for all tax years in which a loss carryforward is available.

The Inflation Reduction Act signed into law on Aug.

16, 2022 and includes several provisions, including the largest investment in combating climate change in U.S.

history, lowers the cost of prescription drugs and raises taxes on corporations.

The effects of the bill were considered and based on the Company’s taxable loss position, there is no tax impact to the provision.

Related Parties

During the years ended December 31, 2021 and 2020, the Company incurred $ 0.04 million and $nil million in expenses to a legal firm whose partner is also an investor and former officer of the Company.

As of December 31, 2021, and 2020, none of these amounts were included in accounts payable.

During the years ended December 31, 2021 and 2020, the Company incurred $ 0.3 million and $ 0.5 million in expenses to a stockholder that provided research and development related services.

Of these amounts, $nil and $ 0.1 million were in accrued expenses as of December 31, 2021 and 2020.

During the year ended December 31, 2021, the Company incurred $ 0.04 million in expenses to a legal firm whose partner is also an investor and former officer of the Company.

As of December 31, 2021, this amount was no t included in accounts payable.

During the year ended December 31, 2021, the Company incurred $ 0.3 million in expenses to a stockholder that provided research and development related services.

As of December 31, 2021, this amount was no t included in accounts payable.

During the year ended December 31, 2022, the Company had no related party transactions.

Subsequent Events

The Company has not identified any subsequent events that require disclosure.

Aura Biosciences, Inc.

March 15, 2023

/s/ Elisabet de los Pinos

Elisabet de los Pinos

President and Chief Executive Officer

/s/ Elisabet de los Pinos

President and Chief Executive Officer

March 15, 2023

Elisabet de los Pinos

/s/ Julie Feder

Chief Financial Officer

March 15, 2023

/s/ David Johnson

Chairman of the Board of Directors

March 15, 2023

David Johnson

/s/ Giovanni Mariggi

March 15, 2023

Giovanni Mariggi

/s/ Antony Mattessich

March 15, 2023

Anthony Mattessich

/s/ Raj Parekh

March 15, 2023

/s/ Sapna Srivastava

March 15, 2023

Sapna Srivastava

/s/ Karan Takhar

March 15, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures